Lifeway Foods, Inc.

Lifeway Foods, Inc. (LWAY) has more than doubled in the last 4 month as the company benefits from strong sales and lower expenses.

Company Description

Lifeway Foods, Inc., together with its subsidiaries, produces dairy and non-dairy health products in the U.S. The company was founded in 1986 and has a market cap of $245 million.

Lifeway's share price has more than doubled in the last 4 months as the company continues to prosper in a very tough environment evidenced by strong first-quarter results, reported on May 18.

First-Quarter Results

Sales were up 24% from last year to $13.7 million. Earnings per share came in at 9 cents, handily beating the consensus of 3 cents.

Lifeway noted that its results were helped by its acquisition of Fresh Made Dairy,, contributing $1.4 million in revenue. The company also noted that it gained in a number of key statistical areas, with cost of goods sold dropping to 60% from 69% last year related to lower materials costs. Lifeway also said lower fuel expenses helped it save on transportation costs.

CEAO Speak

CFO Edward Smolyansky provided some encouraging words about Lifeway's performance, saying that "From top to bottom this was our best quarter since our company was founded exactly 23 years ago."

Estimates Jump

After the solid quarter, analysts raised their earnings projections, with the current year tacking on 7 cents and climbing to 31 cents. The next-year estimate is pegged at 35 cents, a 13% growth projection.

Valuations

Due to optimism, this stock does not come cheap. Based on the current-year estimate, shares are trading with a P/E multiple of 47X, a steep premium to the overall market.

The Chart

Shares of LWAY have been on a tear for the last 4 months, rising from a low just above $6 in early March to a recent high above $15. Take a look at the nice move below.

Read the full analyst report on LWAY